Sellers Q&A: What happens if my home doesn't appraise?

What Happens When Your Home Appraisal Comes in Low?

You’ve accepted an offer, your home is officially under contract, and you’re starting to look forward to closing day. Then you get unexpected news: the appraisal has come in lower than the agreed-upon purchase price.

It can be stressful, but don’t panic! A low appraisal doesn’t necessarily mean the sale is going to fall apart. This is one of those moments when having an experienced Realtor in your corner can make all the difference.

Why Does an Appraisal Matter?

When a buyer is financing a home, their lender will typically order an appraisal to determine the property’s market value. The appraisal helps the lender make sure the home is worth the amount they are lending.

Ideally, the appraised value comes in at or above the agreed-upon purchase price. But sometimes the appraised value is lower than the offer price, creating what is known as an appraisal gap.

So, what happens next?

Don’t Panic—There Are Options

A low appraisal does not automatically mean you have to reduce your asking price or lose the buyer. There are several potential ways to move forward, depending on the circumstances of the transaction. Your Realtor can review the appraisal and the supporting data to better understand how the appraiser arrived at the value. We can also look at recent comparable sales, improvements you've made to the home, and other relevant market information.

From there, we can work with you to determine the best strategy.

Depending on the situation, options may include:

• Challenging or reconsidering the appraisal if there is additional relevant information or comparable sales that were not considered.
• Negotiating with the buyer to determine whether the purchase price can be adjusted.
• Having the buyer make up some or all of the appraisal gap, depending on their financing and willingness to do so.
• Finding another solution that works for both parties while keeping the transaction moving toward closing.

Every transaction is different, which is why having someone who understands the market and knows how to navigate these situations is so important.

At Team Claire, we know that buying and selling a home can come with its share of surprises. We're prepared for the curveballs and ready to help our clients navigate them every step of the way.

If you're thinking about selling your home or already have a home under contract and want guidance through the process, we're here to help.